Studies of the ETS family of transcription factors indicate that they act to regulate the expression of genes involved in cell growth and transformation, and are particularly associated with the erythroid and megakaryocytic lineages of hematopoietic cells. We showed that ETS1 overexpression could induce increased expression of the erythroid lineage in K562 and HEL cells, while FLI1 overexpression induced increased megakaryocytic characteristics. Further studies have shown that FLI1 not only induces expression of the megakaryocytic markers CD9, CD41, CD49b and CD61, but also reduces the expression of the erythroid marker CD71, and reduces the ability of erythroid inducers such as hemin and Ara-C to induce benzidine-positive cells and CD71 expression. FLI1- expressing cells show lower levels of expression of GATA-1, GATA-2 and TAL-1, whose expression is associated with the erythroid phenotype and increased levels of PU.1 expression, which was associated with inhibition of erythroid induction. Co-transfection of FLI1 and GATA-1 promoter-controlled reporter constructs indicate FLI1 inhibits GATA-1 expression at the level of transcription. Our results suggest different ETS family members may act both positively and negatively to affect lineage-specific gene expression. To further characterize the role of ETS1 and FLI1 in normal hematopoietic processes, we have generated retroviral vectors expressing green fluorescent protein (GFP) and a gene of interest as a polycystronic message. Infection of bone marrow-derived cells from 5 FU- treated mice generated a high percentage of infected CD34+ stem cells which were capable of re-populating lethally-irradiated mice. Spleens of these mice exhibited green-fluorescent colonies, and green- fluorescent proliferating cells and methylcellulose colonies could be derived from the bone marrow. These mice should enable us to evaluate the ability of ETS and FLI1 to alter the normal differentiation pattern of murine stem cells in vivo.